In its never-ending wisdom, the federal government in 2020 launched a program as part of its trillion-dollar COVID relief measures to offer cash assistance to small businesses that had been hit hard by the pandemic and the subsequent government-mandated shutdowns.
That program, called the Paycheck Protection Program, or “PPP,” freed up $349 billion - eventually upped to $953 billion - in tax dollars to be funneled to eligible small businesses that applied for the money through their bank to cover costs like payroll costs, rent, interest, and utilities.
And, as usual, what sounded nice in theory turned out to carry a whole host of problems – namely, in the case of the PPP program, fraud, and lots and lots of it.
Meet 38-year-old Mustafa Qadiri, of Irvine, California, who was arrested late last week and booked on charges of bank fraud, wire fraud, aggravated identity theft money laundering after authorities say he used the more than $5 MILLIION – that’s $5,000,000, with six zeros – he was somehow able to obtain from the PPP to fund lavish vacations and three luxury sports cars.
According to the charges, Qadiri obtained the money via multiple banks using a total of four mortgage companies, none of which exist now, to apply for the hardship loan. On top of the trips and three cars – a Ferrari, a Bentley, and a Lamborghini – Qadiri also used the cash to pay for “personal expenses.” While the feds have seized the three vehicles and about $2 million from his bank account, the money he spent on himself and his vacations is gone.
Qadiri pled “not guilty” in federal court Friday, so he must have one heck of an explanation.
Of course, the idea that one might misuse such a hastily cobbled-together program for their own ill-gotten gains isn’t exactly shocking, especially when one considers that the federal government isn’t exactly a master at weeding out fraud, waste and abuse. Now, the feds are having to go through and prosecute the myriad PPP fraud schemes that occurred thanks to the program – an effort that will cost countless more tax dollars.
Lisa Bradshaw Rowberry, a 49-year-old Provo, Utah resident, is currently being prosecuted for fraudulently obtaining $210,000 in PPP loans. Keith Anton Johnson, a Texas bar owner, has been charged with fraud after he received $123,500 for employees that didn’t work at his store. David T. Hines, 29, of Miami, Florida, was arrested after fraudulently obtaining $4 million in PPP loans, some of which he used to buy a Lamborghini.
According to the Project on Government Oversight, as of April 23, the Justice Department had brought criminal charges against at least 209 individuals in 119 cases for fraudulent PPP loans amounting to a total of $445 million.